Away from pay raises and towards job perks, one-time bonuses

New York

YACHT-SIZED bonuses for Wall Street big shots and employee-of-the-month plaques for supermarket standouts are nothing new, but companies' continued efforts to keep costs down have pushed employers to increasingly turn to one-off bonuses and non-monetary rewards at the expense of annual pay raises.

"There is a quiet revolution in compensation," said Ken Abosch, a partner at Aon Hewitt, a global human resources company. "There are not many things in the world of compensation that are all that radical, but this is a drastic shift." According to Aon Hewitt's annual survey on salaried employees' compensation, the share of payroll budgets devoted to straight salary increases sank to a low of 1.8 per cent in the depths of the recession. It dropped to 4.3 per cent in 2001, from a high of 10 per cent in 1981. It has rebounded modestly since the recession, but still rose only 2.9 per cent in 2014, the survey of 1,064 organisations found. Aon Hewitt did not even start tracking short-term rewards and bonuses - known as variable compensation - until 1988, when they accounted for an average of 3.9 per cent of payrolls. Ten years later, that share had more than doubled to 8 per cent. Last year, it hit a record 12.7 per cent.